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Keep in mind that although $78,000,000 is 312x the investment, it's likely that more than 312 investments of $250,000 turn out making absolutely nothing. That's why the rewards are so high: the risks are even higher.



That is an interesting way of framing it.

But are the risks that high? If you took an average sample of investments at $250k would you expect the rate of failure to be 311 for every 312 investments?


No, of course not. The reason VCs exist is because the expected return on investment is positive. But the reason the returns on those $250k investments is so high is because so few people have $250k to invest in something that only has, say, a 1% chance of returning 312x.




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